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New UserRail issues push PRB coal OTC price down further
24 Jun 2014
The over-the-counter price for 8,800 Btu/lb Powder River Basin coal dipped again Monday, as rail issues overhang the Western market.
Mines in BNSF Railway's service area, in the northern reach of the basin, are having trouble guaranteeing shipments, according to market sources, which is helping to push down OTC prices for the PRB contract.
Monday's trading session started with the PRB 8,800 Q4 financial contract clearing at $13.10/st for 10,000 st/month, followed by a Cal 15 trade for $13.50/st for 5,000 st/month. The Q4 contract later traded for $13 for 15,000 st/month.
In the physical market Monday, the July contract was heard to have traded at $12.40 for 1 train (15,000 st), but Platts assessed the front-month (July) price lower at $12.20/st, based on broker marks.
The contract has dropped 7.6% since its intra-month high of $13.20/st on June 10.
The physically-settled Central Appalachia barge (12,000 Btu/lb) contract did not trade Monday, but the front-month July price was assessed at $61.50/st, up 5 cents, based on bids and offers collected from brokers.
The CAPP rail (CSX) contract (12,500 Btu/lb) also did not trade Monday, though a bid for $59/st was heard for the front-month.
Platts assessed the front-month price at $59.25/st, up 25 cents.
In the US FOB market, Platts assessed the price of Eastern coal (6,500 kcal/kg NAR, or roughly 12,200 Btu/lb) at $76.75/st, up 25 cents from Friday.
Also in the Atlantic market Monday, on the globalCOAL screen a 50,000 mt July cargo for Rotterdam with US optionality traded at $70.85/mt, up 35 cents from Friday's trade.
Platts on Monday assessed the spot price of 6,000 kcal/kg NAR (about 11,300 Btu/lb) coal for delivery into Amsterdam, Rotterdam and Antwerp within the next 15-60 days at $71.15/mt, up 15 cents from Friday.
Monday's CIF ARA delivered European assessment market the end of a four-day bear-run, despite general market sentiment remaining pessimistic, sources said.
In the US gas market, NYMEX July natural gas futures settled 8.5 cents lower Monday to $4.446/MMBtu as continued above-average weekly storage injections are expected and a less-supportive temperature outlook than a day ago weighed on the market.
Tim Evans, analyst at Citi Futures Perspective said the updated forecasts which are "somewhat cooler" will allow for above-average storage injections to continue "at least though the week ending July 11."
Source: Platts